Abstract
Nearly 40% of British self-employees are homeworkers. Using a large representative sample of the UK longitudinal survey data, we explore the determinants of self-employed homeworking, distinguishing between genders. We reject the notion that homeworking is a transitional entrepreneurial state that the self-employed “grow out of”, while establishing that both employer status and business structure play an important role in predicting which self-employed become homeworkers. Our findings also shed light on two outstanding puzzles in entrepreneurship scholarship: why so few of the self-employed create jobs for others, and why on average the self-employed suffer an earnings penalty compared with employees.
Highlights
The regional entrepreneurship literature continues to grow rapidly, reflecting enduring interest in understanding entrepreneurs’ venture location choices and the resulting implications for regional economic development
According to the present study, which utilizes data from the British Household Panel Survey (BHPS)—a representative longitudinal dataset of individuals and households residing in the UK—nearly 40% of the self-employed in the UK are homeworkers
We see that the propensity of entrepreneurs to choose homeworking and hire employees is negatively related for the total sample (p < 0.001), the male subsample
Summary
The regional entrepreneurship literature continues to grow rapidly, reflecting enduring interest in understanding entrepreneurs’ venture location choices and the resulting implications for regional economic development. According to the present study, which utilizes data from the British Household Panel Survey (BHPS)—a representative longitudinal dataset of individuals and households residing in the UK—nearly 40% of the self-employed in the UK are homeworkers This fact appears to be little known, in part because apart from a handful of prior studies (Mason et al 2011; Reuschke 2016), entrepreneurial homeworking has been largely neglected as a research topic. Entrepreneurship is widely recognized as a risky occupation: Kihlstrom and Laffont (1979) demonstrated that the most risk-tolerant people are both more likely to become entrepreneurs and to hire workers
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